Move Aside Iran and China, America Has a New Arch-Nemesis
While China and the United States are widely recognised as arch-rivals engaged in a pervasive trade war and technological blockade, the US is facing a new point of tension with its ally, the European Union (EU). Tensions initially escalated when the EU implemented the Digital Markets Act (DMA) and Digital Services Act (DSA), which challenge the monopolies of US tech giants and have resulted in substantial fines for companies such as Google, Meta Platforms, Amazon, and Apple. Donald Trump has previously threatened the EU with high tariffs if these regulations continue to disrupt US tech business, yet the EU remains steadfast.
Most recently, the European Union plans to propose stringent criteria for cloud computing services in critical national tenders. According to documents viewed by Reuters, this policy could exclude Amazon, Microsoft, and Google from such projects. This proposal is part of the European Commission’s Cloud Computing and AI Development Act, which is set to be unveiled by the EU’s technology chief, Henna Virkkunen. The package aims to reduce the bloc’s reliance on US technology and promote domestic European businesses.
The push for sovereignty in sensitive sectors—including banking, energy, and healthcare—is driven by concerns over the dominance of US tech giants and the implications of legislation such as the US Cloud Act, which requires US-based providers to grant authorities access to data even if it is stored abroad. The EU proposal may also introduce mandatory ‘non-price’ criteria for public tenders, including requirements for software and hardware developed within the EU, which would disadvantage major US firms.
This executive plan, which requires support from all 27 member states and the European Parliament, could trigger a harsh reaction from Washington, which has been critical of EU laws aimed at curbing big tech and regulating platforms for illegal content. While the European Commission declined to comment on specific details, it emphasised that its technology sovereignty package is vital for strengthening Europe’s technological capacity, competitiveness, and security. Amazon and Microsoft have also declined to comment.
Other criteria for selecting cloud vendors in critical tenders include levels of data protection, the degree of third-country control over data and services, and the openness of each market to cloud services. The Commission also proposed acting as a central procurement body for EU nations and agencies regarding data centre services, cloud computing, software, and AI systems.
The draft also establishes a fast-track approval process for data centres that gain preferential network access and reduced costs by using European-made chips or cutting energy costs. Last week, Reuters reported on a ‘Chips 2.0 Act’ within the package, which would expand the scope of companies eligible for state funding in strategic technologies. Currently, Amazon, Microsoft, and Google collectively hold over 60% of the global cloud services market. In response to sovereignty concerns, Amazon has launched a service hosted entirely in Europe, while Microsoft has launched locally controlled ventures like Bleu and Delos Cloud. Google is also attempting to remain eligible for sensitive European cloud work through the S3NS joint venture and partnerships with providers like OVHcloud.